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McClatchy-Tribune  07/16/2014 11:12 PM ET
GM hires outside law firm to review legal practices after ignition recall [Detroit Free Press :: ]

July 16--General Motors has hired an outside law firm to review its litigation practices in the wake of the delayed recall of 2.6 million vehicles with defective ignition switches.

Michael Millikin, GM general counsel, disclosed the automaker's latest move to reform itself in prepared remarks he will deliver Thursday before a Senate subcommittee. The Free Press obtained copies of his opening statement.

Millikin joins GM CEO Mary Barra and Delphi Automotive CEO Rodney O'Neal in testifying. It will be Barra's fourth appearance before a Congressional panel.

-- PDF: Read Mary Barra's prepared remarks for GM hearing

-- PDF: Read Michael Millikin's prepared remarks for GM hearing

Millikin has not yet spoken publicly about his role or that of GM's legal department related in the slow response to complaints and crashes caused by malfunctioning ignition switches

"We had lawyers at GM who didn't do their jobs; didn't do what was expected of them. Those lawyers are no longer with the company," Milliken will say in his remarks. "I have taken, and will continue to take steps to make sure something like this never happens again."

An internal investigation conducted by Chicago lawyer Anton Valukas found that some members of the legal team were aware of problems with the ignition switches as early as 2005.

But Millikin said he did not learn of the severity of the problem until days before GM recalled Chevrolet Cobalt, HHR, Saturn Ion, Skys, Pontiac G5 and Solstice, mostly from the 2003 through 2007 model years, on Feb. 13.

The defective ignition switches have been linked to at least 13 deaths and 50 or more crashes.

Of the 15 people Barra fired in the wake of the Valukas report, a significant number were from the legal department.

Millikin has reorganized the legal staff, augmented it with attorneys from two outside firms and appointed an outside firm to review litigation practices at GM.

He has also instructed staff that injury cases involving fatalities or serious injury are be brought to him for review.

Barra will tell the subcommittee again that GM is determined to learn from its mistakes and is putting practices in place to be more responsive to safety problems.

"Overall, we are dramatically enhancing our approach to safety. You can see it in the aggressive stance we are taking on recalls with the redoubling of our efforts," she says in her prepared remarks.

Delphi's O'Neal will testify for the first time on this matter. Delphi manufactured the defective switches for GM at a plant in Mexico.

He is expected to explain that Delphi supplied parts to GM's specifications. Former GM engineer Ray DeGiorgio worked with Delphi engineers to change part of the ignition switch in 2006, but GM never changed the part number. GM has fired DeGiorgio.

Separately, Barra will not meet with victims and their families Thursday in Washington.

On her first visit to Congress in April, Barra met with families of some victims. The lawyer who organized the informal meeting, Bob Hilliard of Texas, represents several people who have sued GM and he has invited her to meet victims prior to each subsequent visit to Capitol Hill.

Some victims and their families are expected to attend Thursday's hearing.

Through GM attorney Kyle Dryer, Barra notified Hilliard that her schedule does not make it possible and she prefers not to meet with victims again until the company's compensation plan is up and running.

GM hired compensation specialist Ken Feinberg to administer the fund and set eligibility criteria to compensate victims of accidents involving recalled vehicles. Feinberg will start accepting applications for settlements Aug. 1.

In his letter to Barra, Hilliard writes, "understandably many of my clients want to meet with you because of what you represent to them. They see your efforts and your commitment to your overwhelming task of razing GM's culture and building a new company ... up and want to believe it. You seem to be crafting the beginnings of what will hopefully be a more responsible corporate citizen."

Contact Alisa Priddle: 313-222-5394 or Follow her on Twitter @AlisaPriddle.


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